The decreased adenylate cyclase activity of transformed cells correlates with the expression of viral transforming protein. MDCK cells transformed with Harvey sarcoma virus express v-ras and exhibit reduced adenylate cyclase responsiveness. The adenylate cyclase responsiveness of 3T3 cells was inversely proportional to their expression of c-ras. Antibodies to c-ras and v-ras immunoprecipitate the guanine nucleotide regulatory proteins of adenylate cyclase (Ns and Ni) but the affinity is greatly reduced compared to that of purified ras protein. Futhermore, purified ras did not substitute for or alter the function of adenylate cyclase regulatory proteins. Transformed MDCK membranes express significant tyrosine kinase activity, although this activity is not regulated by EGF and there is no evidence for transforming growth factor production by transformed cells. Thus, the effect of viral transforming proteins on adenylate cyclase seems to be more indirect. Viral transformation also alters the glucagon sensitivity of MDCK cells. Glucagon sensitivity is expressed only under conditions of high cell density, and can be inhibited by serum during the first 24 hours of culture, suggesting that some early event commits the cell to exhibit glucagon sensitivity. Additionally, the potency of glucagon is 10 fold less on transformed than on normal MDCK cell adenylate cyclase. This decreased potency seems to reflect a receptor defect, rather than altered functioning of other membrane components. The data suggests that viral transforming proteins alter both the expression of glucagon receptors and the function of adenylate cyclase through complex biochemical mechanisms. The possible contribution of extracellular matrix proteins, C kinase and membrane components to alterations in cellular differentiation following transformation are under study.